The risks defined contribution (DC) plans face continue to grow and change. This means that the processes for managing those risks must also evolve. At times, it may feel like you need an expert on DC plan risks solely to keep pace with developments and avoid any missteps.

Fees continue to be one of the main sources of litigation. However, cases are now going farther than they did previously. They are now considering managed accounts and are even moving into nuances of plan administration. This underscores the importance of ensuring that plan administration and governance procedures are well established and well documented.

The following presents a brief overview of the various types of allegations that have been raised in class action lawsuits against DC plan sponsors. This summary is not exhaustive of all the types of litigation DC plans may face. The risks summarized, commentary provided, and settlements noted are as of August 2024.

This summary highlights some of the themes arising from class action DC plan litigation, although the future remains uncertain as to what other facets of DC plan management plaintiff firms may explore next. It can be helpful for DC plan fiduciaries to be educated on these topics and targeted approaches to managing DC plan risks.  It is crucial to have open discussions about governance and the creation and documentation of policies and procedures that safeguard both participants and plan fiduciaries.

Please see important notices